The man in charge of the largest bank in Northern Europe says that fewer people working in finance will help reduce risks in the sector.
Chief executive officer of Nordea Bank Abp Casper von Koskull estimates that in ten years, the industry will have downsized by as much as 50%. And the replacement of human workers with new technologies is a good thing, he says. With automation, the finance industry “actually becomes more robust,” he said in an interview in Helsinki last month. “You can reduce the operational risk.” Downsizing entails cutting costs and creating a more manageable system, crucial steps in an economy that is increasingly digital and fast-paced.
“It’s not my intention to make bold predictions, but I genuinely believe that,” he said.
Von Koskull's company is leading the charge in his predicted trend towards automation. Nordea is in the middle of cutting its staff by 6,000 workers in an effort to increase efficiency through new technologies. He says that banks that fail to do similarly are in danger of falling behind.
“You have over-capacity, which means that the industry probably needs a lot less people than it has today, particularly in central Europe,” where it “hasn’t even started,” the Nordea CEO said. “When you look at deposit gathering, that’s really where the heavy load is.”
“German banking is mostly deposit gathering, it was built for German reconstruction, lots of savings that were channeled into investments,” he said. “You have way too many players. It has way too many banks.”
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